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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Sunshine who wrote (8726)	2/5/2003 10:50:16 PM
From: ild	Read Replies (1) \| Respond to of 306849

Steve, how much is PMI for this loan?

To: Mr. Sunshine who wrote (8726)	2/5/2003 11:31:46 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

$2079 Total monthly housing payments <<To qualify for that amount, a qualifying income of about $5200 is needed, assuming there is no other debt (car payments, credit cards, student loans, alimony, child support, etc.) For a working couple, making a combined $5200 per month is very possible. As a loan broker, I can do some things to stretch that a little bit.>> Let's see...they've poured their savings into making the down payment, so presumably they have little cushion (even without other major debt)...so what happens to our heroes when one of the couple gets, you know, "laid off" 3 months after they close (ie, just after charging for the last furniture purchase)?

To: Mr. Sunshine who wrote (8726)	2/6/2003 5:10:26 AM
From: J. P.	Read Replies (2) \| Respond to of 306849

In this scenario, at this time, if interest rates spike up with a corresponding drop in demand and price the owners will not only be out their down payment but will be upside down and unable to leave this property without a foreclosure or BK. In your scenario, as long as they continue to pay out 50% of their net,they should be able to hang on for the 10 years it will take them to pay down the principle to break even while making the minimum payment due. If they waited for a corresponding price drop with higher interest rates, they will pay the same monthly payment, but they won't be upside down and the down payment will be lower. But any realtor will tell you not to time the market. Seems I've heard that one before about other markets....let me think..... IMO, the ones that get sucked in right now are going to get torched. (Especially first time buyers and those that bought up a house class based on their previous home equity sale alone and not on increased income)